The association is testing Masterchain to facilitate communications within the national banking system, according to the Masterchain white paper. This would mark the latest move to use the platform to replace the SWIFT inter-bank communication network, a use case which was first discussed in April 2018.
The platform was created by the nation’s FinTech Association in collaboration with Russia’s 14 largest banks, including VTB.
According to the white paper, the system will include Russian banks and government agencies responsible for contract registration and market regulation. FinTech is claiming that switching to Masterchain in processing mortgage contracts will reduce operating costs up to five times and instead of days the transactions will take minutes.
The project also is expected to produce a KYC mechanism based on a digital identity so that banks will be able to share credit histories and information about fraud cases without breaking bank secrecy. The system is also going to deal with bank guarantees and letters of credits
However, as previously reported by CoinDesk, the ultimate goal for Masterchain is still to replace SWIFT. In particular, concerns that U.S. or European Union sanctions against Russia in 2014 might eventually remove the nation from the SWIFT system have spurred Russia’s experimentation with alternate financial communication systems. Previous tests have shown issues with processing different document format.
Russian flag image via Shutterstock
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